S1 E8 : HOW BROKERS WORK (ZERODHA, GROWW, ANGEL ONE)

🧠 First, A Quick Reminder:

In the last episode, we learned that to invest in the stock market, you need a Demat Account (to store shares) and a Trading Account (to buy/sell them).

But here’s the big question:

“Who gives you those accounts?”
“Who connects you to the stock market?”

Answer: A Stock Broker.

Let’s break it down step by step 👇

🧑‍💻 What is a Stock Broker?

A stock broker is like a middleman between you and the stock market.

You can’t just walk into BSE or NSE and say, “Hi, I want 2 shares of Tata Motors.”

You need a licensed platform that is allowed to access the stock market on your behalf.

That’s where brokers come in.

📱 Real-Life Examples of Brokers You Know:

These apps are all brokers:

  1. Zerodha (Kite): Super popular — India’s #1 stock broker. Trusted by millions.

  2. Groww: Clean and simple design. Perfect for beginners.

  3. Angel One: Offers strong research tools — great for those who like to study stocks.

  4. Upstox: Fast and powerful, backed by major investors.

When you use these apps, you’re using a broker — even if you didn’t realize it.

They help you:

- Open your Demat and Trading accounts

- Place buy/sell orders

- Store your stocks safely

- Track your portfolio and profits

🔧 What Exactly Do Brokers Do?

Here’s how the system works:

  1. You open an account with a broker app (Zerodha/Groww)

  2. You search for a company like Infosys

  3. You tap “Buy”

  4. The broker sends that order to NSE or BSE

  5. NSE/BSE match your order with a seller

  6. You get the share in your Demat account

  7. The money is taken from your bank

All this happens in seconds — thanks to your broker.

💸 How Do Brokers Make Money?

Most brokers don’t charge to open an account anymore.

So how do they earn?

  1. Brokerage Fees: Every time you buy or sell a stock, they charge a small fee — usually around ₹20 per trade.

  2. Premium Features: Some apps offer paid upgrades for advanced charts, expert tips, or extra tools.

  3. Lending for Margin: They allow users to trade with borrowed money (margin), and earn from that lending.

  4. Mutual Fund or IPO Fees: They get small commissions when users invest in mutual funds or apply for IPOs through their platform.

Some apps (like Groww) don’t charge for delivery trades — but may earn in other ways.

🧑‍🎓 How to Pick the Right Broker for You

Here’s a quick guide:

  1. If you want a clean and beginner-friendly app, go with Groww.

  2. If you prefer something fast, popular, and low-cost, try Zerodha (Kite).

  3. If research and insights are important to you, choose Angel One.

  4. If you want quick alerts and mobile-first speed, then Upstox is a great option.

All of them are SEBI-registered and safe. You can even try more than one.

🧠 Recap – What You Learned

✅ Brokers are your link to the stock market
✅ Apps like Zerodha, Groww, Angel One are stock brokers
✅ They help you open accounts, buy/sell shares, and track your investments
✅ They make money through small fees or premium tools
✅ Choosing a broker depends on your style: beginner, pro, research-based

 

✨ Final Thought:

You don’t need to be rich to open a brokerage account.
With just a smartphone and PAN card, anyone can start.
Pick a broker, explore slowly, and build confidence one trade at a time.